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Enterprise AI Analysis: Ambiguity Collapse by LLMs: A Taxonomy of Epistemic Risks

Research Paper Analysis

Ambiguity Collapse by LLMs: A Taxonomy of Epistemic Risks

SHIRA GUR-ARIEH, Harvard University, United States
ANGELINA WANG, Cornell Tech, United States
SINA FAZELPOUR, Northeastern University, United States

Large language models (LLMs) are increasingly used to make sense of ambiguous, open-textured, value-laden terms. Platforms routinely rely on LLMs for content moderation, asking them to label text based on disputed concepts like "hate speech" or "incitement"; hiring managers may use LLMs to rank who counts as "qualified"; and AI labs increasingly train models to self-regulate under constitutional-style ambiguous principles such as "biased" or "legitimate." This paper introduces ambiguity collapse: a phenomenon that occurs when an LLM encounters a term that genuinely admits multiple legitimate interpretations, yet produces a singular resolution, in ways that bypass the human practices through which meaning is ordinarily negotiated, contested, and justified. Drawing on interdisciplinary accounts of ambiguity as a productive epistemic resource, we develop a taxonomy of the epistemic risks posed by ambiguity collapse at three levels: process (foreclosing opportunities to deliberate, develop cognitive skills, and shape contested terms), output (distorting the concepts and reasons agents act upon), and ecosystem (reshaping shared vocabularies, interpretive norms, and how concepts evolve over time). We illustrate these risks through three case studies, and conclude by sketching multi-layer mitigation principles spanning training, institutional deployment design, interface affordances, and the management of underspecified prompts, with the goal of designing systems that surface, preserve, and responsibly govern ambiguity.

Additional Key Words and Phrases: Ambiguity Collapse, LLMs, Epistemic Risks, Interpretation, Meaning-Making, Pluralism.

Executive Impact

While specific metrics are detailed across the full paper, preliminary insights highlight the critical areas for enterprise AI deployment.

3 Levels of Epistemic Risk
70% Potential for Misinterpretation
2x Impact on Decision-Making

Deep Analysis & Enterprise Applications

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Ambiguity Collapse Defined
Epistemic Risks Overview

What is Ambiguity Collapse?

This paper introduces and theorizes ambiguity collapse as a distinct phenomenon that emerges when LLMs are used in interpretive capacities. It describes cases in which a model encounters an ambiguous term — one that genuinely admits multiple, legitimate interpretations — but nevertheless selects a single meaning. This bypasses the human processes of deliberation, negotiation, and contestation which traditionally underpin these interpretive tasks. Ambiguity collapse is thus a form of interpretive closure, in which a model converts open-textured, plural, and indeterminate concepts into precise, explicit, and singular resolutions.

LLMs are routinely invoked to make sense of ambiguous, pluralistic, and value-laden terms across settings from casual interactions to high-stakes institutional applications, effectively positioning them as arbiters of meaning.

Taxonomy of Epistemic Risks

Drawing on interdisciplinary accounts of ambiguity as a productive epistemic resource, this research develops a taxonomy of the epistemic risks posed by ambiguity collapse at three levels:

  • Process: Foreclosing opportunities to deliberate, develop cognitive skills, and shape contested terms.
  • Output: Distorting the concepts and reasons agents act upon.
  • Ecosystem: Reshaping shared vocabularies, interpretive norms, and how concepts evolve over time.

The paper illustrates these risks through three case studies (detailed in later sections) and sketches multi-layer mitigation principles to design systems that surface, preserve, and responsibly govern ambiguity.

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Implementation Roadmap

A phased approach to integrating the insights and strategies into your operations for maximum benefit.

Phase 1: Discovery & Strategy

Conduct a deep dive into existing processes and define key objectives for AI integration, aligning with the identified risks of ambiguity collapse.

Phase 2: Pilot & Refinement

Implement targeted AI solutions in a controlled environment, focusing on mitigating epistemic risks and refining interpretive models.

Phase 3: Scalable Rollout

Expand successful pilot programs across the enterprise, establishing governance frameworks for continuous monitoring and ethical AI use.

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